News Updates October 20, 2022
1. Tesla Nukes Altcoin Market, Elon Musk Does Damage Control
The Tesla earnings report led to a drop in the company's stock and due to correlation, the crypto and altcoin markets crashed as well. The crypto market struggles due to a wide variety of macroeconomic factors. The altcoins market in particular faced a major crisis. Ethereum fell by 2% in the last 24 hours and is trading at $1281. Meanwhile, Cardano and Solana fell by 3% and 5% respectively. The Tesla earnings report was an important reason for the poor performance of the altcoins market.
Tesla missed its expected earnings for the third quarter and the company’s stock plummeted as a result. In the after-market, $TSLA is down by 6.25%. Tesla CEO Elon Musk informed investors that despite strong demand in the fourth quarter, the company will miss its vehicle delivery target in 2o23.
Tesla was expected to earn over $22 billion in the third quarter. However, the company revealed that its third-quarter revenue was $21.45 billion. Tesla’s gross automotive margin also missed the estimates.
Why Tesla Earnings Impacts The Altcoin Market
The crypto market is strongly correlated to the broader general market. In particular, it shows a strong correlation between technology stocks and the tech-oriented NASDAQ. As major companies miss earnings estimates, the stock market plummets. As a result, the crypto market struggles too.
2. Bitcoin Flat as Volatility Hits 2-Year Low and Stocks Rise
Bitcoin’s 30-day price volatility dropped to the lowest in almost two years, data shows.
With bitcoin unusually quiet at just above $19,000, investors are pondering the implications for the historically high-volatility cryptocurrency.
Blockchain analytics firm IntoTheBlock’s data showed that bitcoin’s 30-day price volatility was at 31%, the lowest in almost two years.
At press time bitcoin (BTC), the largest cryptocurrency by market capitalization, was trading around $19,000, little changed over the previous 24 hours. The CoinDesk Market Index rose 0.07%. Ether (ETH) followed a similar trajectory to BTC, down 0.8% to $1,280 as of press time.
The listlessness offered a contrast with U.S. stocks, which rallied after better-than-expected third-quarter corporate earnings reports. A drop in weekly jobless claims suggested a continued strong labor market.
“The crypto market has become less responsive to macroeconomic problems,” said Serhii Zhdanov, CEO of crypto exchange EXMO.
Bitcoin’s price has come under stiff pressure this year from Federal Reserve interest rate increases, which have buffeted prices for risky assets, including stocks and cryptocurrencies.
Investors across the board remain cautious, with Fed’s next monetary-policy meeting less than two weeks away.
“The bottom line here is that markets still do not have a solid handle on when the current rate cycle will end,” Nicholas Colas, co-founder of DataTrek Research, wrote in a Thursday note. “As long as that is the case, it is hard to see U.S./global equities staging a convincing rally.”
3. Stablecoins Could ‘Fundamentally Alter’ Banking System, Says US FDIC Chief
Acting FDIC head Martin Gruenberg argues that stablecoins need to mesh with regulated banking as well as the Fed’s real-time payments system and any future U.S. CBDC.
Stablecoins could have such a profound effect on the established banking system that U.S. regulators need to require the digital tokens fit in without disrupting it, said Martin Gruenberg, the acting chairman of the Federal Deposit Insurance Corp. (FDIC), at a Brookings Institution event on Thursday.
Gruenberg’s agency is among the U.S. banking watchdogs that will have significant influence over how stablecoins are regulated. The FDIC has also had to weigh in with recent sanctions against firms – such as FTX US – that have made claims misrepresenting how FDIC deposit insurance backstops their operations.
As U.S. banks have increasingly sought to offer crypto services, including maintaining custody of customers' digital assets, Gruenberg said his agency has been cautious about allowing regulated lenders to engage.
Stablecoins could Alter’ Banking System, Says US FDIC Chief
Acting FDIC head Martin Gruenberg argues that stablecoins need to mesh with regulated banking as well as the Fed’s real-time payments system and any future U.S. CBDC.
Stablecoins could have such a profound effect on the established banking system that U.S. regulators need to require the digital tokens fit in without disrupting it, said Martin Gruenberg, the acting chairman of the Federal Deposit Insurance Corp. (FDIC), at a Brookings Institution event on Thursday.
Gruenberg’s agency is among the U.S. banking watchdogs that will have significant influence over how stablecoins are regulated. The FDIC has also had to weigh in with recent sanctions against firms – such as FTX US – that have made claims misrepresenting how FDIC deposit insurance backstops their operations.
As U.S. banks have increasingly sought to offer crypto services, including maintaining custody of customers' digital assets, Gruenberg said his agency has been cautious about allowing regulated lenders to engage.
The FDIC has also had some say over the federal government’s initial approach to stablecoins, which Gruenberg said will need to work in tandem with the Federal Reserve’s future FedNow real-time payments system set to launch next year. Stablecoins – tokens tied to steady assets such as the dollar that are used to trade in and out of more volatile cryptocurrencies – also need to complement “the potential future development” of a U.S. central bank digital currency (CBDC), he said.
“The development of a payment stablecoin could fundamentally alter the landscape of banking,” Gruenberg said. Payment stablecoins could change how credit is extended within banking, “possibly leading to forms of credit disintermediation that could harm the viability of many U.S. banks and potentially create a foundation for a new type of shadow banking.”
4. Turkish Authorities Seize Crypto Worth $40M in Illegal Gambling Sting
Investigators are probing a $135 million transaction that links back to organized crime groups in the country's capital city Ankara.
A crackdown on illegal gambling in Turkey has led to the seizure of $40 million in cryptocurrency, according to the Ankara Chief Public Prosecutor's office.
Authorities detained 46 suspects across Turkey on suspicion of operating an illegal gambling ring that sent ill-gotten gains to cryptocurrency wallets owned by an Ankara-based criminal organization.
"This operation came out of Turkish Cyprus and is linked to the murder of Halil Falyalı," said Turkey's Interior Minister, Süleyman Soylu, as reported in the Daily Sabah. "A transfer of approximately 2.5 billion Turkish lira ($135 million) of money occurred. Approximately $40 million of money has been confiscated at the moment."
Halil Falyalı is a Turkish casino owner who was murdered in February at his home in Kyrenia, Northern Cyprus.
"This is just the beginning," added Soylu about the law enforcement actions.
5. SEC Staff Lacks Skill For Rule Making, Reveals IG Report
The SEC has launched multiple legal battles including the XRP lawsuit over the crypto industry to provide regulatory guidance.
SEC Staff Lacks Skill For Rule Making, Reveals IG Report
The SEC has launched multiple legal battles including the XRP lawsuit over the crypto industry to provide regulatory guidance.
The U.S. Securities and Exchange Commission (SEC) has launched multiple legal battles including the XRP lawsuit over the crypto industry to provide regulatory guidance. However, an Inspector General’s report has suggested that the SEC chair and its staff lack knowledge in making rules for the markets.
6. State Securities Regulators Move to Shut Down NFT Scam Tied to Metaverse Casino
The action comes as states are increasingly joining forces to tackle crypto crimes.
Officials from Alabama, Kentucky and Texas filed cease-and-desist orders against Slotie NFT, alleging the illegal and fraudulent sales of non-fungible tokens (NFT), according to a Tuesday press release.
Based in the country of Georgia, Slotie was accused by the group of funneling proceeds from the NFT sales into online and metaverse casinos.
According to the regulators, the company issued 10,000 Slotie NFTs that provided investors with ownership interests in the casinos and opportunities to earn passive income from their operations. The filings also accuse Slotie of violating state registration laws by failing to register their securitized NFTs with the appropriate securities boards.
The coordinated filings are the latest in what’s been a number of state regulator initiatives to team up to tackle metaverse crimes. In May, officials in five states combined forces to stop a similar scheme promoted by the Flamingo Casino Club and Sand Vegas Casino Club.
